Abercrombie Jumps On Call For New CEO, Possible Sale

By Teresa Rivas

Bucking the downward trend today is Abercrombie & Fitch (ANF), up 5.5% at recent check, on news that activist investor Engaged Capital is urging the firm to replace its CEO—and think about possibly putting itself up for sale.

Glenn Welling’s firm sent Abercrombie’s board of directors a letter, stating it had built a 0.5% stake in the company (about 400,000 shares). While the letter praised Chief Executive Michael Jefferies’ work, it said that the company should be looking for his replacement, as his contract ends in February. Abercrombie responded with fairly boilerplate language, saying that it welcomes shareholder input and that it hopes to continue its ongoing dialogue with Engage.

However, Engaged has more than just a CEO transition in mind. The letter also states: “A sale of the Company to a private equity buyer may represent the best option for shareholders.”

In late November, Abercrombie’s shares took a hit when the company’s full-year earnings forecast disappointed the Street. The stock is down more than 25% in the past year.

Jefferies made waves earlier this year when a 2006 interview in which he said he didn’t want overweight or unattractive teens wearing Abercrombie’s clothes resurfaced. (He also entered into a 10b5-1 trading plan in November, through which he intends to sell about 200,000 of his Abercrombie shares.)

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